Raising the federal minimum wage to $15 has officially gained the status of being a division along the party line, after last week’s announcement that the Democratic Party has added the “Fight for 15” to their national platform. A $15 minimum wage is long overdue and I sincerely hope that it can be achieved, but there is something that is curiously skipped over in the debate over the $15 minimum and its post-implementation, which I call “strategic greed”. This refers to the fact that producers and employers have to power to create a vast, planned economic backlash in response to raised wages, and that there is no reason to expect that they won’t. Though there has been plenty of attention paid to the supposedly market-determined effects the increase would have on businesses, prices and worker’s hours, strategic greed is something that supporters need to make clear that they’re aware of so that they can broadcast their expectations, allowing them to hold businesses and employers accountable for strategic greed If we don’t make it clear that we are aware, the aftermath of winning a $15 minimum could be exactly what the right predicts it will be – because they can and will fulfill their own prophecy.
There is a calculated strategy behind the right’s rally cry of economic disaster in the wake of progressive policy. So-called conservative ideologues know how to manipulatively appeal to the very core of American sensibilities to achieve this: They pervert meritocratic ideals into a caste system based on salary, call on individualism to make exploitation the fault of the exploited, and twist work ethic into the demand for maximum output at minimum pay. The resulting narrative for the working poor is that wanting more (indeed, just wanting enough) is greedy, immoral, dependent and lazy. But for those that employ rather than be employed, wanting more than enough, and being willing to do anything to get it, has come to be downright virtuous.
Let’s start by looking at the most common counter-argument to giving working Americans a decent minimum wage — rampant inflation – and call it what it is: is an obvious case of fear mongering. Of course this isn’t at all surprising, since powerful people who live life on the supply-side stand to benefit from espousing this kind of “sky is falling” incitement, and likely are doing so disingenuously, though some may truly be buying their own lies at this point. Here’s why: Those who have a vested interest in exploiting labor to the maximum have to make a big noise about inflation, because it allows them a fall-back plan for when worker dissatisfaction finally boils over and forces wages upwards, which is what we are seeing now with the Fight for 15. Their strategy is impertinently simple: by crying “inflation!” loud, early and often, they’re setting the stage for a big “told –you-so” down the road, which they will deploy after raising the prices of goods with zero accountability and far in excess of normal inflation rates, effectively pushing real wages right back down to prior levels in terms of buying power. It’s crucial to first have the public believe that inflation works in a kind of tit-for-tat manner – that increasing the pay of a fast-food worker by 5 dollars will increase the cost of a burger by several dollars as well. It won’t, unless corporations decide to pretend so. And it’s a good bet that they will.
This is especially insidious because the damage is not just long-term, but also both concrete and abstract; not only do they reclaim wages from workers in the short term, but they can then also gleefully blame their ideological opponents for a catastrophe of their own making, which means placing further obstacles to pro-worker policies in the future (“We told you raising the minimum would be a disaster!”) gets that much easier. It works to reinforce unquestioning free-market ideology as well, in which inputs create predictable outcomes free of human morality or intervention. The irony is, of course, that this particular outcome can only be due to powerful interests tampering with prices, and the relative value of wages to productivity.
They think workers and consumers are too stupid or uninformed to do the math, and in a way they are right. The political and economic premises presented as fact; natural forces akin to laws of the natural world, are nothing of the kind. We live in a far less absolute political and economic reality than most of us would believe. As the brilliant economist G.S. Shackle once put it: “In natural science, what is thought it built upon what is seen; but in economics, what is seen is built upon what is thought”. And what we think is often dead wrong. Though independent media, aided by the internet, has increased access to diverse information and perspectives, it’s still true that nearly every shred of information the public receives from the punditocracy in media and mainstream political rhetoric operates on the premise that the economy works in ways it really doesn’t. Remember that whole scary fiscal cliff thing from a couple years ago? It’s one good example of faux-crisis propaganda, manufactured to produce the necessary political climate to get the public behind terrible, terrible ideas, like austerity (see: Kansas , Greece).
The fearful doomsaying that constitutes opposition to a living minimum wage – not just runaway inflation, but pay being proportionate to the value of the work, (to which I say the non-grocery food, beverage & tobacco industry has a significantly higher profit margin — at almost 30% — than any other sector — even IT and software, which includes some of the highest paid workers. Where is all that profitability coming from? Exploitatively low labor costs), and “fairness” to workers already at or near a $15 wage. Ironically, most opponents to the $15 minimum believe that the market adjusts to conditions and rewards people proportionally; but suddenly seem to abandon this belief when they argue that a rising tide won’t lift any other boats. If you ask me, we shouldn’t be questioning why minimum wage workers should be getting $15 an hour, but rather why Paramedics are making only $15 an hour. That equates to $31,900 annually, or for a family of four, floating only $580 per month above the federal poverty threshold (which many argue is absurdly low to begin with). There’s also a lot of talk about how we shouldn’t raise the minimum because it will cause businesses to cut workers’ hours, in what amounts to retaliatory action. This is especially bizarre, because while there is so much attention paid to worker’s demands for a $15 minimum possibly resulting in harm to them, it seems taken for granted that the businesses doing the cutting to preserve their current (often very high) profit margins are the assholes actively threatening to make it happen. That’s practically like saying an abused spouse just shouldn’t have burned the roast if they didn’t want to get backhanded, instead of blaming the abuser. Addressing such threats rather than the demand for a living wage seems a more logical route, but it is not often pursued, even by supporters of the $15 minimum.
With many options to keep competition brisk and decentralized decision makers independently pricing their products, there is little opportunity to raise prices so artificially high. This is the marketplace that mainstream economists, politicians and big business love to pretend exists. In a diversified economic climate as described, raising the minimum wage to $15 would have a positive effect – as businesses see an uptick in consumption, and therefore revenue, due to an increase in expendable incomes.
Raising the minimum wage to $15 should have corresponding positive effect in our economic reality, too; in which consolidated industries are both our major employers and producers run by a small cabal of interconnected and politically engaged capitalists. But, in the same way that businesses who gain enough market share become “price-makers” instead of “price-takers” when it comes to purchasing raw material, the raw material of labor is being subjected to what amounts to a massive wholesale discount. That is, these companies are getting so fucking big, and so influential in our legislative and regulatory processes, that they are not subject to competitive labor costs. Instead, they get to define the general price levels of commodities at either end of production: both for consumables, and labor.
To ensure long-term success and benefits, we have to look to the Fight for 15 not as a short-term political win on one issue, but just one battle in a larger class war – and wars are by nature strategic. We can’t ignore large-scale strategy in opposition to our demands, just as we can’t win without strategy of our own. The forgotten problem of strategic greed is something we need to be vocal about, and it needs to be considered in the strategy for winning a living wage. Otherwise, it will sneak right by us and rescind the working class victory that the Fight for 15 represents.
Image via New York Times